Meet Firmo: smart derivatives to improve blockchain based finances!

The importance of finance

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The world of finance plays a huge rule in our global economy and in the development of innovative ideas that can improve the lives of everyone.

This is an industry that will always be important because its goal is to make the money be as productive as possible, by allocating it to the best ideas that need funding, with the goal of eventually allowing the idea to reach the market and find success as a product or service.

Because of this, having proper and trustworthy financial instruments and a stable financial structure is pretty much a requirement in order for any ecosystem to thrive, especially in the case of blockchain technology that is meant to take over any industry there might be.

State of finances in the Blockchain industry

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As we all know, blockchain technology has bring the world a new way of making financial transactions and funding entrepreneurial projects, increasing the freedom of people all around the world by providing them with an alternative financial network, and new ways of handling their money.

A similar impact can be found on developing projects, that now thanks to blockchain, they have been able to found a new way of creating applications and platforms to serve their users, as well as a new way of finding support for their ideas, thanks to the possibility of approach fundin with a method g only possible using crypto currencies, the initial coins offering (ICOs).

It is fair to say that the blockchain industry has come a long way in its journey to change the world by improving the way in which every type of transactions is made. From book keeping, to betting systems, to the distribution of medicines, blockchain is capable of disrupting everything.

Nevertheless, there is a particular part in the financial industry that has been quite hard to disrupt, and don’t have much presence in any blockchain project.

What we are talking here is financial derivatives, in case you don’t know what a derivative is in the world of finances, they are defined as:

A derivative is a financial contract that derives its value from an underlying asset. The buyer agrees to purchase the asset on a specific date at a specific price. | Source

A real world example of a derivative will a restaurant reaching a deal with their fruit supplier, using the prices of today, but making the payment down the road. This is a very common way of doing business.

Derivatives are responsible for a considerable % of the world economy because it offers traders a sophisticated way of exchanging assets, but when it comes to cryptocurrencies, doing something like this is more difficult because the prices are extremely volatile which is something that doesn’t happen in the traditional financial industry, or at least not too often.

Since cryptocurriences prices change extremely fast, making a deal on a fixed price simply cannot be done, it is too risky for both parts.

Firmo offers stability and security

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The solution offered by the Firmo teams starts with the revolutionary programming language called FirmoLan, which unlike the Solidity language used by Ethereum, is more secure given its simplicity that leaves less security holes, and therefore, reduces the possibility of being fiercely attacked by a group of hackers.

One of the most important aspects, is that the Firmo team is planning to not only work with the Ethereum blockchain, but also with any other major blockchain there is, like NEO or EOS and this is clearly a wise move thinking about the long term future, because in the end, as of now is really difficult to say which blockchain is going to end up as the leader, so developing the possibility of deploying their smart contracts in several blockchains will increase the possibilities for this project to find success and a user base with a considerable size.

Below you can see a graphical example of how the transaction will happen, since its beginning until its final deploying in the blockchain, notice the different blockchain projects at the end.

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Because just as derivatives are extremely popular in the traditional financial sector, they could also be popular under blockchain platforms if there was a secure way of managing these types of transactions, and thanks to Firmo, this problem is going to be solved, and it might as well serve as a force towards more stable prices all around the industry.

This could eventually be the beginning of a new generation of all sort of financial services for the crypto space, making the entire industry gain strength and legitimacy, especially for people that are still doubtful when it comes to crypto discussions.

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Above you can see graphical representations on how the smart contracts will work under the Firmo platform

If the blockchain industry is ever going to be massively adopted, it needs what Firmo is offering, which basically is an innovate way to make transactions without being affected by security and volatility issues.

Another important feature is the fact that their protocol offers the possibility to use template when deploying a smart contract into the platform, this is very important since obviously not every person or entity knows how to write code, and it will make things much easier for everyone, besides this will also be of huge help to contribute with the adoption in an industry that is getting more and more competitive by the day, because of the potential it has to bring innovative solutions to the world. So being recognized by the market and becoming the preferred platform for the handling of smart contracts is certainly within their possibilities.

In the world of finances, there is another concept called collateral, which consists on:

Collateral is a property or other asset that a borrower offers as a way for a lender to secure the loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses. | Source

Using the Firmo platform, there is a feature called "Zero Coverage" that offers the possibility to register derivatives without the need of a collateral, making these type of transactions even easier that what they already are by using Firmolang, and allowing mutual trust between the parties to be a factor to take into account when participating in these transactions and its corresponding register on the blockchain.

Summary

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Firmo has found the way to improve the blockchain industry by leveraging the simplicity in their programming language to be able to offer better security, and stability in the entire market with the goal of making it more convenient for the users to do advanced financial transaction in a decentralized way, which is something that didn't existed until now.

They are certainly capable of achieving their goals with this project, because the team is conformed with people with considerable experience and specialized knowledge about related subjects, like Asset Management, technology management on important companies, developers of mobile applications, software engineering, and since they have a useful idea for the blockchain space, their success should be just a matter of time.

If this wasn't enough, they also have a high end of academic advisers, that will certainly be of huge help when it comes to figuring out solutions and implement them in the platform.

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As a final point, here is a video I just made sharing my thoughts about this project and mentioning the most important aspect that in my opinion can help Firmo become the best platform for smart contracts.